Human beings use their physical and intellectual abilities together with technology to produce some type of creation, whether art, music, clothes, cars, food, health, agricultural produce, and so on.

Almost any human activity today seems to depend in some way on technology.

3Technology in Modern SocietyThe underlying issue seems to be not so much whether technology should be used in modern society, but to what end and purpose.

Even a small technological change can have a giant impact upon human life and social organization.

Example air conditioning

One small change can set in motion important consequences in the rest of society the Butterfly Effect.

What will be the ultimate societal impact of Genetically Modified (GM) foods or nanotechnology or neuroscientific brainscans?

4Modern Technology Defined

In modern society, technology often takes on a specialized and particular meaning The practical application of science and scientific material to industrial or commercial objectives. In short, applying science to industry.

Science deals in part with understanding the external world, including the physical and chemical properties of matter, energy, and space. Technology thus involves applying these scientific understandings to modern industry and industrial pursuits.

5Technology and Economic Theory

Adam Smith really did not examine technology in Wealth of Nations.

Smith completes most of the Wealth of Nations by 1765, before the emergence of the British Industrial Revolution. Smith therefore missed most of the unprecedented technological advance that would define the next two centuries, and indeed modern society.

Malthus neglected technological change as well when he introduced his Malthusian Doctrine Ricardo neglected technological change in his theory of Comparative Advantage.

Adam Smith creates a particular understanding of society and markets, called perfect competition (1) Large number of small firms in each industry. (2) Each firm produces the same exact product homogeneous output. (3) No firm is large enough or powerful enough to control price firms are price takers, not price makers. 6Technology and Economic Reality

In the real world, technology not only exists, it seems to be a central component of most economic activity.

Today, firms use new technology in the development of new products. They also use new technology to produce products in different and more efficient ways in order to gain market share and market power.

In short, firms seek to use new technology in part to gain a monopoly position in markets.

Most industries today are defined by innovation and technological change, and what has been called imperfect competition, where a small number of producers dominate industries monopoly and oligopoly

Music Industry Warner Music, EMI Group, Universal Music Group (UMG), Bertelsmann Music Group (BMG) and Sony.

Technological advance thus marks both CONSUMPTION and PRODUCTION in modern society.

9Technology and Economic Theory

Schumpeter and Marx argue that technological change can create concentration in industries, securing monopolies and oligopolies.

Companies that introduce new technology often realize an advantage over competitors. First, they can sell existing products for a cheaper price. Second, they can introduce entirely new products for which there is no existing competition.

Kleenex, Xerox, Jello, iPod

For Schumpeter and Marx, the economic system itself produces technological change and advance. Rapid technological change therefore has certain economic dimensions it results in part from the operation of the modern economic system.

In short, rapid technological advance results from competition and the drive for profit that help define capitalism.

10Technology and Economic Theory

Thorstein Veblen also believed that technology lay at the heart of modern society.

For Veblen, innovation and creative thinking are part of what it means to be human. Technological advance is not so much a product of the environment of industrial capitalism in a way, modern industrial society is the product of innate technological advance and human creativity.

Example Open-Source Movement Linux

Veblen introduces new and interesting questions Is technological change a result of the market system of profit-seeking, or the result of an inherent need that humans have to create?

Could profit-seeking even thwart human creativity? Some companies buy out competitors in order to keep their technology from reaching the market. Or develop technology that is then kept from the market. Others attempt to sabotage the technology of competing companies.

FUD (Fear, uncertainty and doubt). Microsoft and Google.

11Technology and Economic Policy

Technological advance seems to give some nations an economic advantage over other nations. Most modern nations therefore attempt to promote technological development via economic policy.

The encouragement of technological development is an important part of economic nationalism and the modern nation-state. The Internet.

Every society must obtain technology somehow, even societies that see technology as producing negative social outcomes.

Soviet Union and the Five Year Plan

North Korea and reverse engineering.

12SummarySome sources of modern technological change 1. Schumpeter. Creative Destruction market competition induces technological change, creating new types of consumer goods, and new ways of producing goods. Advanced technology and technological change are products of industrial capitalism. 2. Veblen Technological change is the result of innate human creativity, which at times may conflict with the activity of profit-maximization. Technological advance and pecuniary gain are two different processes. 3. Hamilton and List State power and economic policies must seek to promote technological development. Economic policy provides needed support and guidance to technological change, thus securing national economic growth. 13The Social Impact of Technology

Feudalism begins to break down in part because of technological advance in medieval towns, and in agriculture.

By the 1450s, technological change begins to reach other parts of European society

Gutenbergs printing press provides an impetus for the scientific revolution that would follow.

The ideas of the new philosophers depended on the technology of Gutenbergs printing press. And their new books and ideas were disseminated using the printing press, that is, a particular form of technology.

14Technology and Economic History

The Industrial Revolution itself begins in Great Britain with a technological breakthrough.

Production of clothing required introduction of the spinning jenny. Within that one invention, British industry could produce clothing in 1/374th the time that it took competitors, creating a great cost advantage for British producers.

This type of technological advance would mark the Industrial Revolution in Europe, the US, and Japan, including such examples as the assembly line and mass production. Such technological advance marks nearly all industries today.

Why are technological advances so effective in modern society? Often, new technology is labor-saving, and provides a way to reduce labor cost. Technology can be used to replace workers (or lower the wages of workers, as demand for skilled labor falls). Deskilling.

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